Bechtel Corporation v. Citgo Products Pipeline Company, No. 03-05-00430-CV (Tex. App. 10/3/2008)

Decision Date03 October 2008
Docket NumberNo. 03-05-00430-CV.,03-05-00430-CV.
CourtTexas Court of Appeals

Appeal from the District Court of Caldwell County, 22nd Judicial District, No. 01-0-213, Honorable Todd A. Blomerth, Judge Presiding.

Reversed and Rendered in part, and Conditionally Affirmed in part.

Before Justices PEMBERTON, WALDROP and SMITH; (Justice B.A. SMITH Not Participating)



A work crew employed by MasTec North America, Inc. d/b/a Wilde Construction (MasTec/Wilde) ruptured an underground gasoline pipeline owned and operated by CITGO Products Pipeline Company (CITGO) while excavating for an underground telecommunications line. Approximately 390 barrels of gasoline escaped into the surrounding area before the spill could be contained. CITGO incurred substantial expenses in responding to the spill and remediating contamination to soil and groundwater. CITGO sued MasTec/Wilde; C&S Network Construction, a MasTec/Wilde affiliate also involved in the project; and Bechtel Corporation and Bechtel Telecommunications (collectively, Bechtel), the construction manager on the project. CITGO's claims were tried to a jury. Based on the verdict and evidence it subsequently heard on attorney's fees, the district court awarded CITGO a total of $1,461,955.80 in actual damages from MasTec/Wilde (which had assumed C&S's liabilities in addition to its own), $115,919.48 from Bechtel, prejudgment interest on these amounts, and $295,357.25 in attorney's fees from MasTec/Wilde. MasTec/Wilde, C&S, and Bechtel have jointly appealed the judgment, bringing fifteen common issues. We will reverse and render judgment in part, and conditionally affirm the judgment in part.


The pipeline rupture occurred in May 1999, while appellants were laying an underground fiber-optic cable for Enron Broadband Services, Inc., as part of Enron Broadband's "Texas Loop Project." Enron Broadband hired MasTec/Wilde to lay the cable. MasTec/Wilde, in turn, subcontracted with C&S to work on the project. At all relevant times, MasTec/Wilde and C&S were each wholly-owned subsidiaries of MasTec, Inc. As their working arrangement was described at trial, MasTec/Wilde operated "rip crews" who would plow or "rip" trenches in the ground in which the cable would be placed, while C&S operated "bore crews" that would drill or bore holes underground as necessary to lay cable beneath obstacles. Enron Broadband also hired Bechtel as its construction manager for the Texas Loop Project. Bechtel's job included supervising the progress of the cable-laying operations.

The nature of the work to be performed on the Texas Loop Project implicated the Underground Facility Damage Prevention and Safety Act, commonly known as the Texas "one-call" statute. The current iteration of the one-call statute is codified in chapter 251 of the utilities code. See generally Tex. Util. Code Ann. §§ 251.001-.203 (West 2007). At the time this case arose, however, the one-call statute was contained in article 9033 of the revised civil statutes, Act of Apr. 23, 1999, 76th Leg., R.S., ch. 62, § 18.17(a), 1999 Tex. Gen. Laws 392, 392-402 ("Former art. 9033"), and the case was tried, submitted, and briefed on appeal with extensive reference to that version of the statute. Although the two versions are largely identical in substantive respects material to this proceeding, we will refer to the former article 9033 version for clarity.

The one-call statute generally requires that any person intending to "excavate" (as MasTec/Wilde and C&S undisputedly were1 ) to give notice to a "notification center" not earlier than the 14th day before the date excavation is to begin or later than the 48th hour before the time excavation is to begin. Former art. 9033, § 9(a). Such notice shall include (1) the name of the person serving the notice; (2) the "location of the proposed area of excavation," including a street address, if available, or "an accurate description of the excavation area using any available designations such as the closest street, road, or intersection"; (3) the name, address, and telephone number of the excavator or excavator's company; (4) the excavator's "field telephone number," if available; (5) "the starting date and time and the anticipated completion date of the excavation"; and (6) a statement as to whether explosives will be used. Id. § 9(b).2

A "notification center" under the one-call statute refers to an entity in which "operators" of "Class A underground facilities"—which include underground gasoline pipelines3 —must "participate," as a condition of doing business in Texas, by providing the notification center maps, grid locations, or other identifiers indicating the locations of the operator's underground facilities; updates regarding any changes in such information; and the name and telephone number of a contact person or persons. Id. § 7(a), (b). The notification center, in turn, is required, within two hours after receiving a notice of intent to excavate, to transmit the information received from the excavator to "each member operator that may have an underground facility in the vicinity of the proposed excavation operation." Id. § 8(b), (c).

A C&S employee, Clint Ferguson, had the responsibility as "construction locator" to make the required "one-calls" for both the MasTec/Wilde rip crews and the C&S bore crews working on the Texas Loop Project. A portion of the project, approximately 8.5 miles in length, was to run through southern Caldwell County—the Luling area—along the north side of State Highway 90. Work on this portion of the project commenced in April 1999. Beginning as early as April 12, 1999, Ferguson made a series of one-calls to a notification center in advance of and during the crews' work in Caldwell County. The notification center, in turn, generated notifications to operators of underground facilities in the area.

East of Luling, the route of the planned Texas Loop Project excavation crossed a gasoline pipeline, known as the CASA Pipeline, that was owned and operated by CITGO. As one of the operators who had underground facilities in the area, CITGO received the notices transmitted by the notification center in response to Ferguson's one-calls. The information transmitted by the notification center reflected that the work was to be performed by "C&S Construction" for "Enron," and provided Clint Ferguson's name and a phone number as the designated contact. The location of the proposed excavation was described in these notices as the entire right-of-way along the north side of Highway 90 running from the Caldwell-Guadalupe County line easterly to the Caldwell-Gonzalez County line.

The one-call statute requires that an operator who receives a one-call notice must—generally within 48 hours after the time the excavator gave notice to the notification center of its intent to excavate, or "at a time agreed to by the operator and the excavator""mark the approximate location of its underground facilities at or near the site of the proposed excavation if the operator believes that marking the location is necessary." Former art. 9033, § 14(a).4 The statute also affords an operator the right to be present at an excavation site if it meets certain conditions:

To have a representative present during the excavation, the operator shall contact the excavator and advise the excavator of the operator's intent to be present during excavation and confirm the start time of the excavation. If the excavator wants to change the start time, the excavator shall notify the operator to set a mutually agreed-to time to begin the excavation.

Id. § 9(c). Importantly, if "[a]n excavator . . . has fully complied with the Act," the statute further provides, the excavator "may not be liable for damage to an underground facility that was not marked in accordance with the Act." Id. § 14(c).

It is undisputed that, on May 7, 1999, a MasTec/Wilde rip crew struck the CASA Pipeline with a "rip cat,"a piece of machinery, weighing 70,000 to 80,000 pounds and having an 8 to 10 foot blade, used in trenching operations to "rip" or break up ground in advance of a bulldozer or plow. The impact ruptured the pipeline. Although there was fortunately no explosion, approximately 390 barrels of gasoline escaped before the spill could be contained. CITGO was able to recover only about 40 barrels of the gasoline. The escaped gasoline caused contamination to soil and groundwater. In addition to its lost product and pipeline repairs, CITGO incurred substantial expenses in responding to and remediating the spill.

Trial centered largely on whether appellants or CITGO were responsible for the accident and the extent to which CITGO, C&S, and MasTec/Wilde had each complied with their respective obligations under the one-call statute. To summarize, CITGO maintained that its employees and agents had promptly responded to each one-call notification by contacting Ferguson to inquire about the details of his crews' upcoming work. During these conversations, according to CITGO, Ferguson was informed that CITGO intended to have a representative present if his crews excavated near the CASA Pipeline and that Ferguson had agreed that no such work would occur without prior notice to CITGO. It further claimed that in response to a one-call notification it received on the morning of May 7, CITGO's Sam Bentley called Ferguson and obtained assurances that Ferguson's crews would be working several miles to the east of the CASA Pipeline area that day. Under CITGO's theory, appellants breached these understandings or promises and violated the one-call statute when the MasTec/Wilde rip crew excavated in the area later that day without prior notice and without a CITGO representative present.


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